This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Acquisition Of CEC Entertainment By Apollo Global Management, LLC May Not Be In Shareholders' Best Interests

SAN DIEGO and IRVING, Texas, Jan. 17, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of CEC Entertainment (NYSE: CEC) by an affiliate of Apollo Global Management, LLC. (NYSE: APO).  On January 16, 2014, the companies announced the signing of a definitive agreement pursuant to which Apollo will commence a tender offer to acquire all outstanding shares of CEC for $54.00 per share in cash.

(Logo: http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

Is the Proposed Merger Best for CEC and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at CEC is undertaking a fair process to obtain maximum value and adequately compensate CEC shareholders in the merger.

As an initial matter, the $54.00 consideration represents a premium of 24.6% based on CEC's closing price on January 7, 2014.  This one day premium is substantially below the average one week premium of over 33% for comparable transactions in the last three years. 

Further, On October 31, 2013, CEC released the company's financial results for the period ended September 29, 2013, reporting increases in total revenue and net income for the first nine months of 2013.  Specifically, CEC reported an increase in total revenue of $17.5 million to $643.2 million, compared to the same period in 2012.  The company also increased net income by 8.4%, or $3.7 million, to $47.9 million, compared to the same period in 2012.  In addition, CEC reported diluted earnings per share of $2.78 per share for the nine months ended September 29, 2013, as compared to $2.50 in 2012. 

Given these facts, Robbins Arroyo LLP is examining whether the CEC board of directors are seeking to benefit themselves with their decision to sell the company to Apollo now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects. 

CEC shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.  CEC shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, ddonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.

Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law.  The law firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.   

Attorney Advertising. Past results do not guarantee a similar outcome.  

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,288.63 +155.93 0.86%
S&P 500 2,117.39 +12.89 0.61%
NASDAQ 5,008.0960 +44.5690 0.90%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs